STATE INCOME

The headline indicator, real net disposable income per capita, is available only at the national level. To understand some of the trends underlying the national indicator, one can look at state contributions to GDP.

Real gross state income per capita grew in every state and territory between 1998–99 and 2008–09. Growth was strongest in Western Australia and the Northern Territory (both averaging 5.4% per year), and weakest in New South Wales (averaging 1.9% per year). During the same period, Australian real gross domestic income per capita grew by 2.8% per year. Gross domestic income is calculated by adjusting GDP for changes in the terms of trade.

There were wide and persistent disparities in real gross state income per capita levels among the states and territories between 1998–99 and 2008–09. Western Australia and the Northern Territory had the highest levels of real gross state income per capita in 2008-09, relegating the ACT, which had the highest real gross state income per capita in 1998-99, to third. In 2008–09, real gross state income per capita levels ranged between $43,000 and $74,000 (in 2007–08 prices), with Tasmania the lowest and Western Australia the highest (ABS 2009b).

State disposable incomes (if we could measure them) might not be so diverse because there are significant transfer payments and other financial flows between states that can moderate the differences. Examples include Commonwealth government taxes and expenditures, and incomes transferred between states or territories and the rest of the world.